Skip to main content

FM warns defaulters: Clear dues or give control to others

FM warns defaulters: Clear dues or give control to others
Finance Minister Arun Jaitley Thursday issued a stern warning to big loan defaulters responsible for a steep rise in the bad loans or non-performing assets of the public sector banks. He warned them either to clear their dues or allow others to take control of their companies.
However the finance minister admitted that there is no short term solutions to the problem of bad loans.
Jaitley said: “You can’t have a surgical solution to it.”
Rising NPAs or non performing assets of public sector banks have seen sharp rise in recent years.
The RBI has already recommended banks to initiate insolvency proceedings against 12 large defaulters.
As per an official reply given in the Rajya Sabha in the Monsoon session, the total advances to corporate sector in 2017 were around 18 lakh crore rupees and nearly 15% (14.83%) or 3.44 lakh crore rupees were declared as non perorming assets (NPAs).
As per the official reply in the Rajya Sabha, as on March 31, 2017 the gross NPAs of public sector banks in iron and steel sector alone was Rs. 165,661 crore and for power sector it was Rs.30,380 crore which is 56% of the total NPAs of advances given by the public sector banks to corporate sector.
Jaitley also said that consolidation of PSU banks was on cards as the country needs fewer but stronger banks.
Defending the demonetisation a day after the release of RBI data that disclosed that nearly 99% of the total banned notes had come bank in the banking sector, Jaitley said the fallout of demonetisation was on predicted lines and the economy would benefit in medium and long term.
Jaitley said the fact that money got deposited in banks did not mean that all of it is legitimate money.
“It’s nobody’s case that black money has been completely eliminated after demonetisation,” he said.
Jaitley said demonetisation, coupled with GST, will give a “significant boost” to direct tax revenues as many people have come under the tax net.
Although an overwhelming amount of money was deposited in banks it is not a concern for the government as it is good for the economy that more money has come into the formal system.
“The fallout of demonetisation is on predicted lines…the fact that money got deposited in banks doesn’t make it legitimate money,” he said, adding the country was ready for demonetisation even though there was political resistance.
The RBI yesterday said about 99 per cent of Rs 15.44 lakh crore demonetised currency came back into the system.
On the Goods and Services Tax (GST), Jaitley said its inflationary impact has been avoided and there is a scope of convergence of tax rates going forward.
The Economic Times, New Delhi, 01st September 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

RBI rushes in to prop up falling rupee

RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…